Jim Cramer's 7 Deadly Investing Sins: Sin No. 1 - Relying on the Macro
Action Alerts PLUS portfolio manager Jim Cramer sees a fundamental shift in investment cash flows happening, as investors rotate toward stocks with lower price-to-earnings multiples and away from stocks with higher ones.
As Cramer always says, good stock picking is all about avoiding mistakes, and the mistakes investors tend to make can be boiled down into Jim Cramer's 7 Deadly Sins.
The first of those sins is leaning into the macro tea leaves too much.
"While I believe you should have a six-month world view on what's going to happen, I further believe that those who talk about the macro have become biased to a fault," Cramer told AAP call members.
That bias is magnified when the macro environment is being dictated by a person as polarizing as President Donald Trump.
A left-leaning investor may constantly see a recession around the corner, leading him or her to be a proponent of being short or having a lot of cash.
Or if you back Trump, your view may be skewed toward believing that the good times will continue for as long as he is in office.
"I, however, make my assumptions from the bottom up.
Therefore, a bias becomes hard to creep into my thinking," Cramer said.
"I have particular disdain for the macro royalty who deign to pick stocks.
They are often ill-advised and ill-informed.
So, never let your political bias influence your stock picking." Bull Market Fantasy: LIVE TUESDAY & THURSDAY @10:45AM Subscribe to our Youtube Channel for more videos : Listen our latest Podcasts on Soundcloud Catch Up: Today's Top News Videos Below